Tokai v. Easton: Deference to the PTO and Hindsight Bias in Obviousness Analysis

The recent Tokai v. Easton opinion (PDF) raises a timely standard of review issue that the Supreme Court will soon consider in Microsoft v. i4i, and highlights the danger of hindsight bias in an obviousness analysis.

The timely issue here regards the level of deference that a court should accord the Patent and Trademark Office (PTO) when considering prior art references that the PTO did not consider during prosecution. Should the clear and convincing standard for invalidating an issued patent be further tightened for prior art that the PTO had previously considered? The Supreme Court will take up this issue soon in the Microsoft v. i4i case, which is set for oral argument on April 18, 2011. [1]

The rest of this piece focuses on hindsight bias in the court’s obviousness analysis.

Summary of the majority opinion

Tokai sued Easton for infringing patents related to safety switches in long-nozzle lighters, such as ones often used to light backyard barbecues. Both Tokai and Easton have sold millions of their respective lighters. Under the district court’s broad construction of the claims, Easton admitted to infringing, but successfully challenged the patents as invalid for obviousness. Easton asserted some “new” [2] prior art which, when evaluated in combination with prior art that the PTO actually considered during prosecution, invalidated some of Tokai’s patents as obvious. Tokai appealed to the Federal Circuit from the district court’s decision entering a summary judgment of invalidity for obviousness of all of Tokai’s asserted patents.

On appeal, Tokai argued “that the [district] court failed to impose on Easton an enhanced burden to rebut the presumption of validity of the asserted claims, because some of the asserted prior art references were considered during prosecution.” The majority, agreeing with Easton, cited several Federal Circuit precedents and emphasized that “an added burden of deference to the PTO is not required… with respect to invalidity arguments based on evidence that the PTO did not consider.” [3]

As for the obviousness analysis, the majority’s opinion did not address hindsight bias explicitly. Judges Lourie and Bryson methodically analyzed the undisputed facts under the four Graham factors, and applied the standards for obviousness determination outlined in KSR. They quote from KSR that the nature of the mechanical arts is such that “identified, predictable solutions” to known problems may be within the technical grasp of a skilled artisan. And they concluded that all the asserted claims were invalid as obvious because a person having ordinary skill in the art (PHOSITA) would be able to make minor modifications necessary to make the combined elements from the prior art work in the claimed invention.

Summary of Judge Newman’s dissent

In her dissent, Judge Newman found that the parties presented a “genuine issue of material fact as to the obviousness of the asserted claims,” therefore summary judgment was not warranted.Judge Newman warned against hindsight bias. She wrote that “[t]he determination of obviousness is not whether a person could, with full knowledge of the patented device, reproduce it from prior art or known principles. The question is whether it would have been obvious, without knowledge of the patentee’s achievement, to produce the same thing that the patentee produced. This judgment must be made without the benefit of hindsight. It is improper to take concepts from other devices and change them in light of the now.” Judge Newman also stressed that “[n]or is it reasonable to trivialize an improvement by its relative simplicity. To the contrary, the fact that this improvement eluded discovery, and that its advantages were immediately apparent to the marketplace and to the competition, weigh in favor of non-obviousness.”

Hindsight bias in an obviousness analysis

How much does hindsight bias creep into an obviousness analysis in the post-KSR world? Hindsight bias is inevitable as part of human nature. Studies have shown that “a juror’s knowledge of the invention makes the juror much more likely to believe that the invention would have been obvious.” One way to avoid hindsight bias is to first determine an objective PHOSITA who is frozen in time, and then consider the prior art and the knowledge in the field strictly through the lens of the PHOSITA. In the post-KSR world, with no explicit teaching or suggestion necessary for an obviousness finding, a court arguably has to rely on the PHOSITA’s common sense more than before to avoid hindsight bias.

With complicated technologies, the skill level of the PHOSITA is inevitably high and methodically fixed in time by the litigants, and a court has no choice but to rely on the hypothetical PHOSITA’s perspectives and consider relevant facts through the PHOSITA’s objective lens. The judges, jurors, and attorneys usually do not have sufficient expertise in the subject matter to conflate personal knowledge and skill with a PHOSITA’s level of knowledge and skill.

The danger of hindsight bias most likely arises when the technology is relatively straightforward such as in the case here. With simple mechanical technology, a PHOSITA’s skill level may not be so lofty. For example here, the court’s definition of the PHOSITA is someone “with aptitude for high school shop class.” In such case, a lay person may feel familiar enough with the technology that personal understanding and knowledge of the art conflates with or perhaps even replaces the PHOSITA’s objectivity. The hindsight bias problem enters into the picture because a PHOSITA’s knowledge, no matter the skill level, is frozen in time (the time relevant to the invention), whereas a lay person’s knowledge (judge, juror, attorneys, etc.) is constantly evolving. Most people, including the judges, have used long-nozzle lighters of one design or another before. Such familiarity cannot simply be erased from memory. Thus in the post-KSR world, validity of patents covering elegant mechanical inventions that seem simple and obvious to millions of consumers may increasingly fall victim to findings of obviousness stemming from hindsight bias.

For a more in depth analysis of hindsight bias, see the following papers: